Rupert Murdoch has lavished praise on Apple's iPad, describing the device as a "game changer" for news media and predicting that "hundreds and hundreds of millions" of similar tablet computers will eventually be sold around the world.

Speaking as a global advertising surge and box office takings from the movie Avatar helped his News Corporation empire deliver a $2.5bn full-year profit, Murdoch predicted the iPad's convenient style could reinvigorate journalism: "We'll have young people reading newspapers."

The Australian-born billionaire, whose businesses range from the Times, the Sun and the Wall Street Journal to Fox television and the Hollywood studio 20th Century Fox, believes the iPad is the ideal device to encourage consumers to pay for digital journalism.

"I think we're going to see, around the world, hundreds and hundreds of millions of these devices," said Murdoch on a conference call with Wall Street analysts. "There will be all sorts of things we can do with them. As they develop technologically, we've got to develop our methods of presentation of news."

News Corp's profit for the year to June was a turnaround from last year's $3.4bn loss, when the company was hit by huge accounting write-downs in the value of businesses such as the WSJ's publisher, Dow Jones.

A big driver of its reinvigorated performance was James Cameron's smash hit futuristic 3D film Avatar, which helped 20th Century Fox deliver a 59% surge in operating profits to $1.35bn.

The group's Fox television network in the US reaped rewards from hit shows such as Glee and Modern Family, while publishing division HarperCollins attributed higher earnings to sales of Sarah Palin's political memoir, Going Rogue.

Murdoch's newspapers, too, had a better year with profits up by 13% to $530m. In Britain, the News International stable of papers enjoyed lower newsprint costs and improved advertising income – fourth quarter advertising revenue at the Sun was up by 22%.

But with analysts still concerned about a weak recovery from the recession on both sides of the Atlantic, Murdoch added: "There is sufficient fragility for us not to be over-confident about the long term, or the medium term."

Despite "fragile" economic conditions, Murdoch said promotional spending had been surprisingly strong: "We've had almost inexplicably good advertising and great confidence there."

He declined to comment on readership figures at the Times and the Sunday Times since the newspapers' websites went behind a paywall, except to say that the initiative was going well. And he dismissed reports that News Corp might buy the Texas Rangers baseball team, saying the company was "in the business of buying sports rights for our television networks, not buying teams".

News Corp, which owns 39% of satellite broadcaster BSkyB, recently made a bid approach to take full control of the television company, although BSkyB's directors rebuffed the offer's £12bn valuation of the business as too low.

The potential tie-up is being examined by regulators. News Corp's chief operating officer, Chase Carey, made it clear there was no guarantee of any extra money on the table, pledging the company would take a "disciplined approach".

The weakest spot in News Corp's finances continued to be its digital media division, where losses at the social networking website MySpace continue to pile up. Murdoch said he had confidence in a new management team charged with changing the direction of MySpace, which has been eclipsed in popularity by rival Facebook. He indicated that News Corp would keep trying to turn it around: "We'll see it through for some time yet."